IRS Verified Financial Installment Agreement

A verified financial installment agreement is simply an installment agreement that requires financial disclosure in order to be approved. This is not the name of an official IRS installment agreement. Rather, it's a descriptor used when a taxpayer sets up a streamlined or non-streamlined installment agreement, and the IRS requires a collection information statement. The info on the statement helps the IRS verify your financial situation, and it reassures the IRS that you're making the largest payment possible. 

Key Takeaways

• Who? Taxpayers who owe over $50,000 or need more than six years to pay.
• What? A verified installment agreement is when the IRS verifies your financial info before letting you set up a payment plan.
• Why? The IRS verifies your details to ensure you're paying the most you can afford.

Who Needs to Set Up a Financially Verified Installment Agreement?

Generally, if any of the following statements apply, you will need to disclose details about your financial situation in order to obtain an installment agreement.

• The minimum payments you propose are not enough to pay off the tax debt within six years or if sooner, by the Collection Statute Expiration Date (aka the last day the IRS can legally collect the debt).
• You owe over $50,000.
• You owe over $25,000 but less than $50,000 and don't want to set up direct debit payments.
• You owe between $25,000 and $50,000, have defaulted on a payment plan in the last 12 months, and cannot afford the minimum payment for the payment plan.

Why Does the IRS Require Financial Verification?

The IRS wants to take a look at your finances to ensure that you are paying the most you can. When you're dealing with this level of debt, the IRS wants to ensure that you're not just delaying paying as a form of credit while you use your money for other purposes. The agency also wants to ensure they're receiving the highest payments possible.

Additionally, there are also practical reasons why the IRS only requires verification if you owe over a certain threshold. It's simply too labor-intensive to require collection information statements on lower levels of tax debt. In fact, to save time and resources, the IRS changed its procedures for a few years around 2021. During that time, if you owed less than $250,000, you did not have to provide a collection information statement unless you had a history of default or were working with a revenue officer who required a collection statement.

As of 2025, the instructions for the Form 9465 (updated in July 2024) indicate that the IRS now requires financial verification on all payment plans on tax debts over $50,000 as well as in the other scenarios outlined above.

What Is a Collection Information Statement?

A Collection Information Statement (CIS) includes information about your assets, income, liabilities, and expenses. Generally, the IRS requests Form 433-F for verified installment agreements, but if a revenue officer wants more detailed information, they may request Forms 433-A or 433-B. 

If you are required to submit this statement, it is highly recommended that you use a licensed tax professional if you want to improve your chances of success with your application. Although the CIS is full of numbers, a lot of the information is subjective. There are also ways to optimize the outcome to the taxpayers' benefit.

For instance, let's say that you list a piece of heavy machinery like a dump truck on your CIS. The IRS may see this asset and demand that you sell it or take a loan against the equity. However, a skilled tax professional may be able to convince the IRS that you need the excavator for work, and its equity should not be considered when calculating your monthly payment plan amount. 

Types of Installment Agreements That Require Financial Verification

Here are the general requirements for an installment agreement requiring financial disclosure:

• Businesses that owe over $25,000 and individuals who owe over $50,000.
• Individuals who owe less than $250,000 and have defaulted on an installment agreement in the last few years.
• Individuals who owe an assessed balance between $25,000 and $50,000 and do not want to pay via direct debit or payroll deduction.

Additionally, you must meet the following criteria if you want to set up any type of payment plan, whether it's verified or not.

• Cannot be in bankruptcy.
• Have not had an Offer In Compromise accepted on the tax balance that you want to make payments on.
• Completed the previous six years of tax returns -- or completed the last five and filed an extension for the latest year.
• Compliant with IRS payments in the past.

Generally, the IRS requires you to pay all new tax balances when you have an existing payment plan. If you don't pay after the IRS issues a demand for payment, the agency can terminate your installment agreement -- in fact, this is the most common reason for termination. However, there are rare exceptions where new tax liabilities can be rolled into existing Installment Agreements

How To File A Verified Financial Installment Agreement

If you owe less than $50,000, you can start the application process online, and then, the system will prompt you to complete a collection information statement if needed. Typically, you will need to complete that on paper and mail it to the IRS or call them with the information. If you owe more than $50,000, you can do the following to apply:

• Fill out Form 9465 (Installment Agreement Request)
• Print and complete IRS Form 433 (Collection Information Statement). 
• If you have defaulted in the last 12 months and owe between $25,000 and $50,000, complete Part II of Form 9465 instead of Form 433-F.
• Mail the form to the IRS or call 1-800-829-1040 to provide the information over the phone.

If you're filing a tax return and want to set up payments on that tax liability, you can attach the Form 9465 to your tax return. Most tax prep software even lets you fill it out to file electronically. 

Special Instructions for Form 433-F

Many individuals need to complete Form 433-F. Here is an overview of what to expect on that form. Note that this is very similar to the information requested on Forms 433-B and A. 

• Part A: Accounts and Lines of Credit. List all your financial accounts such as checking accounts, IRAs, 401ks, brokerage accounts, etc. You need to include at least 90 days' worth of statements for all of these accounts.
• Part B: Real Estate. Note your properties including your primary residence, vacation homes, and timeshares. Then, list your monthly payments, and write the equity of each property. Equity is the value of the property minus what you owe on it.
• Part C: Other Assets. This includes automobiles, boats, and life insurance policies. You also have to note monthly payments and equity.
• Part D: Credit Cards. List all credit cards, their balances, and your minimum monthly payments. This includes store cards.
• Section E: Business Information. Note any accounts receivables owed to your business and include information about whether or not your business accepts credit cards.
• Part F: Employment Information. Share details about your income and your spouse’s income. You need copies of your paystubs and contact details for your employers. You also need to note how often you get paid.
• Part G: Non-Wage Household Income. Detail other sources of income. This includes alimony, child support, self-employment income, rental income, and pension. It also includes unemployment income, social security payments, and interest and dividends.
• Part H: Living Expenses. Explain what you need to live on and fill in your dependents.  This section includes monthly expenses for rent, food, transportation, mortgages, student loan payments, medical bills, and more. You also need copies of bills for the last three months.

What If You Need to Change Your Agreement?

To make changes to a financially verified installment agreement, you may need to complete a new financial information statement. The IRS may require this if you reduce the monthly payment or need to add a new balance to your existing agreement. However, if you simply want to change the date of your withdrawal or update your bank account details, you can usually do that online.

Alternatives to Verified Installment Agreements

An installment agreement is the most common way that people resolve their tax debts. However, it is not the right decision for everyone, and in fact, the Taxpayer Advocate Service (TAS) says that about 27% of people who set up installment agreements may have qualified for an offer in compromise or currently not collectible status. To ensure that you're making the right decisions for your finances, you may want to consult with a tax professional. They can look over your situation and provide you with customized guidance.

If the IRS is requiring financial verification, you probably owe an uncomfortable amount of money. If you cannot pay off the balance by the end of the collection period, you may qualify for a partial payment installment agreement. In fact, when you complete the application process explained above, the IRS will let you know if you qualify for a PPIA. If so, you will make small monthly payments, and then, any debt remaining at the end of the collection period will be eliminated. However, if your ability to pay improves while you're on the payment plan, the IRS may require larger payments or payment in full.

As indicated above, you may also want to consider an offer in compromise. That is where you make a lump sum payment, and the IRS waives the remaining portion of the debt. Cannot afford to pay anything, right now? Then, you may want to look into currently non collectible. With that option, you provide a collection information statement, and once you prove that you cannot pay, the IRS stops all collection actions against you.

Use TaxCure to find a licensed tax pro in your local area. A tax pro can help you identify the best option in your situation and execute the plan. They can also guide you through state tax debt and help with any other tax problems you have. Using TaxCure, you can narrow down the results to find someone who has the particular experience you need.

Disclaimer: The content on this website is for educational purposes only and does not serve as legal or tax advice. For specific advice regarding your tax situation, contact a licensed tax professional or tax attorney within our network.